In the coming week, there is no doubt that the global focus will be on the US election, so I have spent some time carefully sorting out the upcoming timeline and key points, and looking ahead to the subsequent impact. In general, from Tuesday, November 5th, the election results will be announced gradually over the next week, and the progress of the results announcement will continue to affect asset prices during this period.
Due to the different election policies in each state, the results of the US presidential election will be announced over the course of about a week
When chatting with friends, I found that everyone is not very clear about the time rhythm for the next week, and everyone thinks that the results will come out on the evening of November 5th (early morning of the 6th in Beijing time). In fact, due to the different policies of each state in terms of ballot processing, vote counting rules and mail-in ballots, there are differences in the announcement of the results, so I first want to talk about the timeline of the US presidential election. Let's start with the overall election rhythm, which is as follows in the coming period:
1. Election Day: The US presidential election is usually held on the Tuesday after the first Monday in November. Voters will vote for the presidential and vice presidential candidates on this day. This is an indirect election, as voters are actually voting for the members of the Electoral College in their state.
2. Electoral College Voting: The US uses the Electoral College system. The number of electors for each state is determined by the number of its members of Congress (number of Representatives + number of Senators), totaling 538 electoral votes. Most states use the "winner-take-all" rule, meaning that the candidate who wins the popular vote in a state can get all of that state's electoral votes (except for Maine and Nebraska). A presidential candidate needs to win at least 270 electoral votes to win.
3. Formal Electoral College Voting: The members of the Electoral College will vote on the second Monday in December to formally elect the President and Vice President. The voting results will be sealed and submitted to Congress for certification.
4. Congressional Certification: In early January of the following year, the new Congress will convene on January 6th to officially count the Electoral College's votes. If there are no objections, the results of the presidential and vice presidential elections will be confirmed.
5. Presidential Inauguration: The elected President and Vice President will be sworn in on January 20th and officially become the new President and Vice President, beginning their four-year term.
So next Tuesday, November 5th, most swing states will start voting from 6am and continue until 7pm-9pm in the evening. After the polls close, the vote counting process will begin, but due to the different policies of each state, the announcement of the results will be at different times. Here is a summary of the result announcement situation for some of the more critical states:
1. California: California allows a longer period for receiving mail-in ballots, as long as the mail-in ballots are postmarked on Election Day and arrive within a specified period, they can be counted in the total. Additionally, due to the state's large population and the allowance of more time for vote counting, California is often one of the last states to announce the final results.
2. Pennsylvania: Pennsylvania usually only starts processing mail-in ballots on Election Day, which slows down the counting process, especially in years with a high volume of mail-in ballots. And as a key swing state, or so-called "battleground state", Pennsylvania's vote count is usually highly scrutinized, but the final results are often announced a few days after Election Day.
3. Michigan and Wisconsin: These two states also only process mail-in ballots on Election Day, and as swing states with small vote margins, this can lead to a longer counting process to ensure accuracy, usually completed by late evening the next day.
4. Nevada: Nevada allows mail-in ballots to arrive several days after Election Day, so the results may be delayed by a few days, especially in a presidential election year with a high volume of ballots.
5. North Carolina: North Carolina allows mail-in ballots to be received up to 9 days after Election Day, as long as they were postmarked on or before Election Day. This means the final results in North Carolina are often delayed, usually taking about a week to be announced.
You may notice that except for California as a Democratic stronghold, most of these are swing states, with Pennsylvania being an especially critical battleground state. Therefore, the entire game surrounding the election will reach a climax in the few days after the general election.
The House of Representatives election is also very important, as it determines the implementation of the United States' future fiscal policy
In addition to the presidential election, the results of the U.S. House of Representatives election are equally important. We know that in the U.S. federal government, the president, the Senate, and the House of Representatives together constitute the core framework of the separation of powers. The president holds executive power, while the Senate and the House of Representatives (collectively known as Congress) jointly hold legislative power. These three are independent of each other yet closely related, in order to achieve checks and balances and supervision. The House of Representatives is the lower house of Congress, with the following main powers:
- Legislation: The House of Representatives drafts and votes on bills, and together with the Senate completes the legislative function.
- Fiscal power: The U.S. Constitution stipulates that all financial and tax bills must be first proposed by the House of Representatives, to ensure that taxpayers have direct representation.
- Impeachment power: The House of Representatives has the power to initiate impeachment, and can impeach the president or federal officials, but the trial power belongs to the Senate.
Therefore, it can be said that the distribution of the House of Representatives determines the difficulty for the president in implementing his own economic policy. A president whose party does not have a majority in the House is usually called a "minority president", and the difficulty in passing legislation is generally extremely high.
The House of Representatives election is held every two years, and in the presidential election year, the House of Representatives election and the presidential election are usually held on the same day, typically on the first Tuesday in November of every even-numbered year. On that day, voters will vote to elect the president and all 435 seats in the House of Representatives.
Therefore, under normal circumstances, the results of the two elections will be announced gradually within a similar time frame, but the specific order may vary. However, under normal circumstances, since the House of Representatives districts are smaller, the vote counting is faster, so the results are usually announced earlier.
Outlook on the subsequent impact of the election results
In previous articles, we have analyzed the economic policies of the two parties. Here is a brief review: the Democratic Party's Kamala Harris's core economic policy is "opportunity economics", which can be summarized as increasing government investment and raising taxes to raise the income level of middle-class families in the areas of housing, healthcare, education, and consumer goods.
The general market expectation is that Harris's economic policy will further increase the government's fiscal burden, further undermine the credibility of the U.S. dollar, and at the same time, the wealth effect brought about by the flood of money will help drive up inflation. However, since the government is using mandatory intervention to control consumer prices, I believe that inflation will be on an overall upward trend.
As for Trump, his economic policy can be summarized in the following three dimensions: first, low tax rates domestically and high tariffs externally; second, using measures such as interest rate cuts to lower the exchange rate of the U.S. dollar against major manufacturing countries; and third, opposing the new energy industry and advocating the revitalization of the traditional energy industry. This policy is closely related to the interest group - the blue-collar class in the Rust Belt.
Although isolationism and trade protectionism have obvious effects in attacking foreign products and reviving the domestic low-end manufacturing industry, considering the current industrial structure of the United States, the implementation of these policies requires time and will be accompanied by higher inflationary pressure. Even Trump must consider how to use the hegemony of the U.S. dollar to alleviate these problems.
There are some indications that he may choose to achieve this goal through Bitcoin. The reason for this is that Trump has repeatedly expressed his concern for the "Bitcoin mining capacity in the United States". He advocates ensuring that the remaining Bitcoins will be produced in the United States. Considering his support for traditional energy industries such as oil, stimulating the Bitcoin mining pool, an energy-consuming industry, will help increase oil demand and increase the added value of the industry.
Secondly, Trump's view on Bitcoin has changed significantly during his current term, from originally not recognizing the value of Bitcoin to acknowledging its value as a commodity. This change in logic is still related to the pricing power advantage of the U.S. dollar. Since the current liquidity of Bitcoin is mainly maintained through stablecoins pegged to the U.S. dollar, the U.S. dollar actually has control over the pricing of Bitcoin.
By recognizing Bitcoin as a commodity and actively promoting this consensus globally, U.S. dollar capital can establish an advantage in this field, thereby realizing the harvesting of interests.
Therefore, in summary, I believe that if Harris is elected, the "Trump trade" will quickly disintegrate, and at that time, the BTC price will quickly pull back, but will then re-enter a volatile upward phase, and other Altcoin assets in the form of security tokens will be affected by the wealth effect and experience a bull market similar to the overall rise after the pandemic stimulus in 2021.
If Trump is elected, the BTC price will also experience a "Sell the truth" phenomenon in the short term, with some profit-taking operations, but in the subsequent cycle, the BTC price will quickly open an upward channel, while the Altcoin market will not be easy to experience a comprehensive bull market, and more will be to absorb the spillover of the wealth effect brought by the appreciation of BTC, and the capital will rotate among multiple hot spot sectors, with a pattern similar to the market situation at the end of 2023.
Of course, if the elected president becomes a "minority president", the situation will become more complicated, and we need to continue to pay attention to the game between the two parties on economic policies. Any legislative proposal will go through intense market competition, and the price volatility will be significantly increased at that time.
